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For a business to be successful, it should fulfil the needs of its customers. To fulfil the needs, it is important to understand exactly what the customers want from the product. Different customers buy the same products to fulfil different needs. These needs can be classified as functional needs, psychological needs, and social needs. 

A consumer looking to satisfy a functional need will not necessarily consider which brand he buys. He will buy the product just because he wants that product and to derive a particular function from it. Then why do companies attach a brand name to their product? Why do customers choose to buy the same product from one brand over another? The answer lies in the concept of brand image and brand perception. 

While purchasing a product, the customer opts for a particular brand because he feels that it serves a better quality product, or it will raise his image in society. Here the customer is focused on satisfying his psychological and social needs, respectively. Different images of different brands help a customer choose one brand over another. 

Sometimes, a company maintains such a good brand image that even if its competitors offer better quality products, the customers prefer not to buy from the competitors. This is because buying the competitors’ product may not give them that psychological satisfaction or social recognition that they are looking for. The reason for this is that the competing company might not have a good brand image. Hence, we can observe that brand image plays a very important role in deciding a company’s success. 

In today’s competitive world, firms need to understand how their brand is positioned in the minds of the customers and how they can change that position according to the goals of the firm. Proper positioning improves your probability of success. Coming up with an innovative, new product is not enough to ensure a huge customer base. Ensuring that the customer perceives the need and importance of that product on the same level as the firm is very important.

Some firms may introduce a brand to fulfil a specific need of the customers, but customers may perceive the brand to fulfil a completely different need. This gap between how the marketer wants the customers to perceive a brand and how the customers perceive it is a reflection of improper positioning of the brand in the minds of prospective customers. This can lead to high losses and a competitive disadvantage. 

Hence, psychology and perception plays a vital role in the field of marketing. Successful marketers integrate psychological theories with marketing principles to get a competitive edge. Marketers understand the various factors that affect a brand’s image and position the brand in such a way that the firm can capture the potential customer base with high brand loyalty from the customers. 

Let us consider an example of a bad brand image. Ugly Drinks Inc. aims at providing a healthy alternative to all sugary soft drinks that are currently used by consumers. The name of the brand, ‘ugly’, however, creates a negative image in the minds of customers as it shows that the company focuses on an ugly angle of the drinks. It makes the customers think that the drink is dirty and tastes bad. The company’s brand name also seems to suggest that healthy is usually ugly. Hence, it did not attract potential customers in the manner the company expected. 

Brand image is the interpretation of the customers about the products, services, and communication of brand. A customer not only buys the product or service, but also the image associated with that particular product or service. That image of the product helps to satisfy the psychological and social need of the customer. Therefore, it is very important for the companies to not only focus on the quality of the product but also its image. Hence, it can be concluded that companies should make every effort to make the brand image unique, positive, and instant. A positive brand image is essential, as more than 90% of all purchase decisions taken by mainstream customers these days are based on brand image and nothing else. 

An example of a good brand image is that of McDonald’s. McDonald’s is quick and inexpensive food. Commercials of the firm and other such elements consistently reflect the image of the brand. All the methods of communication and actions of the company create an image in the minds of potential customers that their products include affordable food with which customers are quite comfortable. This helps the customers know what they will get once they reach a McDonald’s outlet. 

Let us consider an example of a bad brand image. Ugly Drinks Inc. aims at providing a healthy alternative to all sugary soft drinks that are currently used by consumers. The name of the brand, ‘ugly’, however, creates a negative image in the minds of customers as it shows that the company focuses on an ugly angle of the drinks. It makes the customers think that the drink is dirty and tastes bad. The company’s brand name also seems to suggest that healthy is usually ugly. Hence, it did not attract potential customers in the manner the company expected. 

A brand is a complex organism. From the above examples, we can understand that it is very important for a firm to have a positive brand image, as a negative one can distract potential customers and can become a cause of low sales for a firm, thereby reducing the firm’s profits.